If you look at local and regional media outlets, you will see one very consistent message: new foreclosure filings are increasing.
The measures differ depending upon geography, but the national trend, which has been apparent for months, is that the increase, year over year, is somewhere around twice what it was in 2021 and is nearing 2008 levels in many communities.
But if you look at press releases from Black Knight you will see that reported increases in delinquencies and foreclosures are at their lowest point in years.
I might add that our own services are strained by requests from homeowners — an increase of about 300%.
So why is there a difference? Or, more specifically, why does Black Knight want people to believe that foreclosures are not a problem when they are spiking? Or even more specifically, who is Black Knight trying to convince?
The answer to all of the questions is the answer to the last question: Who is Black Knight seeking to convince?
They are trying to convince prospective investors who continue to buy worthless certificates that masquerade as mortgage-backed securities. Those certificates are (a) not securities (b) not backed and (c) have nothing to do with the ownership of mortgage loan accounts.
The value of the certificates occurs strictly by virtue of an artificial marketplace that poses as an exchange, but which is entirely controlled by ICE (Intercontinental Exchange) which also owns MERS the NYSE etc.
In plain language, the “value quoted on the “exchange” is the value of the certificate even though it only represents the potential receipt of monies paid in satisfaction of a discretionary promise from investment banks who are operating under fictitious names like “U.S. Bank as trustee for the Structured Asset Security Corporation pass-through certificates series 2006-A01.”
In my time on Wall Street I learned a lesson that I gradually understood to be generally true everywhere. People move in groups often without any individual member of the group learning, absorbing or deciding on data and conduct. They do this partly because they are lazy, partly because they are gullible, and partly because even if the decision was wrong, they feel covered by the fact that everyone else was doing it.
Most money managers, fund managers, and investment gurus follow other money managers, fund managers, and investment gurus.
So once Goldman and Citi convinced some managers and gurus that their “securitization” plan was a good thing (even though nothing was securitized other than a discretionary promise from investment banks), it became apparent that not only would managers and gurus follow, but also insurance companies and rating agencies (with a little “help” in the form of threats and promises).
So back to why Black Knight is lying about current market conditions (in my opinion, but check it out yourself). The answer is simple. They are doing in a concerted effort to sell more certificates to idiotic fund managers following a crowd of other idiots.
But even idiotic fund managers know that you don’t buy assets when you know that the alleged underlying “market” is tanking. Most people have not done their homework.
They believe what the investment bank book runners and sellers have told them: that the value of the certificates is derived from the promises of homeowners to make payments, as secured by mortgage liens on their property.
They think investment banks have devised a plan to own the loans without becoming lenders or successor lenders subject to lending and servicing laws. They think they can have it both ways.
The problem for Wall Street and Black Knight is that even though there exists a complete disconnect between the certificates, the investment banks, and the ownership of any loan accounts, the market “Value” of the certificates is entirely dependent upon the perception that the connection exists.
Hence the sale of certificates is entirely dependent upon fund managers (i.e., investors) continuing their belief that they are investing in an active, healthy, and safe marketplace.
But if fund managers were to perform the due diligence that they are expected to perform, they would discover that foreclosures are increasing, which means that payments from homeowners are decreasing.
This one fact makes the promise of cash flow more unlikely to be maintained at least at the promised levels. Thus, managers would either not pay anything for those certificates or want to pay less because they are assuming more risk.
Of course, such calculations completely ignore the reality of these deals. Investors will only get paid as long as the investment banks are selling new certificates and adding the proceeds into reserve pools that are used to fund “servicer advances,” which, amazingly enough, have been subject to still more false claims of securitization.
Why is this important for homeowners and lawyers to know? Because virtually every foreclosure in the U.S. is based upon a foundation relating to false claims of securitization. The foundation is only real if the asset (loan) is sold. Otherwise, there is no securitization because there is no sale.
And THAT means that lawyers, judges, lawmakers, and law enforcement have completely missed the boat. In virtually all cases, foreclosure claims are strictly limited to claims made by attorneys who have contrived ignorance of the falsity of their claims.
They have contrived ignorance of the identity of their client and the party whom they name as Plaintiff in judicial foreclosures or beneficiary in nonjudicial foreclosures is a party with whom they have had no contact, no retainer, and no relationship.
You might not want to believe this. That is OK. But you might want to consider the fact that I have won most of the cases in which I was lead counsel or legal consultant for the defense of a foreclosure proceeding.
I won because I proceeded on the premise that the story told in this article is true. And any lawyer who wants to make money should consider this.
Any lawyer who wants to establish a reputation for winning should consider this. And no lawyer should assume they know about securitization, which is a highly complex stratospheric ball of complexity.
I only know it because I was there on Wall Street when the movers and shakers first planted the seeds for this nonsense in the early 1970s. It was one of the reasons I left, thus leaving a void at Garfield & Co. members NYSE, AMEX, and 5 other exchanges. And so that brokerage firm was sold in 1983.
Lawyers will start making reputations, profits, and windfalls when they (a) win the defense and then (b) sue for wrongful foreclosure, fraud, or abuse of process.
Filed under: foreclosure |
Bravo! Excellent article Neil; and Anon’s commentary is, as usual, right on point! Thanks Anon, your input is always informative and very useful – If I had the money I’d have Neil as counselor. If I had the money is the operative terms. it is time the US Gov starts funding litigation – the wasted money on CFPB should have been ear marked for each and every American citizen consumer. Please continue to post these articles, and thanks to Bill Paatalo!
Sent to me — spending on housing, food, entertainment, clothing, transportation, etc – by Generation Z – whoever they are – is far less today than pre- 1945 or anytime thereafter. What do they know that has escaped us? Spending – stop!!!!!
This is true. The elephant in the room is the U.S. government WHO needs to keep the fraud going because the U.S. economy is worthless without it. All services are based upon on fraudulent “financing” to purchase goods. Does not anyone recognize that the U.S. economy is very largely based upon consumer spending? If housing – major source of wealth in U.S. for spending collapses – there is no more spending. Stock market based on SPENDING alone. We have nothing to offer for exports. Manufacture little. Cannot survive on consumption economy based upon sole source of wealth for majority of Americans – the American home – which is tapped by fraud.